For most of us, a car is critical to our ability to work and remain independent. It is a part of our very identity. So it’s no surprise that the question of transportation often tops the list of a client’s concerns.
Colorado Springs Bankruptcy Attorney Stephen H. Swift understands the law and is committed to deploying it the best advantage of each client he takes the responsibility of representing. The truth of the matter is bankruptcy can improve your financial position in a number of ways, including what you choose to drive.
The law allows you to keep a vehicle with up to $5,000 in equity. Thus, most clients can keep their primary vehicle.
- Leased vehicles have no equity – you can keep them.
- Most newer vehicles depreciate faster than they are paid for; thus they have less than $5,000 in equity and can be kept.
- Even older vehicles under loan have less than $5,000 in equity. If you owe $6,000 on a $10,000 vehicle, you can keep the vehicle.
Keeping your Vehicle Through Colorado Bankruptcy
Most often, the question that should be asked is not whether you can keep your vehicle, but should you? That’s because bankruptcy laws provide some powerful protections when it comes to dealing with bad debt associated with vehicles.
- You may be entitled to keep you vehicle with a reduced interest rate.
- You may be able to have your vehicle debt restructured to eliminate negative equity.
- You may be able to turn in a leased vehicle without suffering the penalties by making the penalties part of a bankruptcy.
The truth of the matter is that auto loans are among the most common forms of consumer debt, and among the easiest loans to get. Loans are granted largely based on your credit score and your income-to-debt ratio. Typically, by the time a consumer files bankruptcy, their credit score has been ruined by late payments and their income-to-debt ratio is highly unfavorable.
Buying a Car After Colorado Bankruptcy
After a bankruptcy is discharged, many consumers find it easier to get a car loan. Their income-to-debt ratio has largely been reset and their credit score is on the mend. Sure, the interest rate you will pay will be higher for a short while after bankruptcy, but being proactive in handling your credit issues will once again make you a worthy risk to many lenders.
As this discussion of bankruptcy and vehicle issues has demonstrated, bankruptcy opens doors. Too often, an uninformed consumer views bankruptcy as the last chapter. When, in fact, it’s the first chapter of a new beginning.
If you are facing financial issues in Colorado Springs or the surrounding areas, contact us today to discuss your options. The Law Office of Stephen H. Swift offers a free initial consultation to discuss your situation, your rights and whether bankruptcy may be right for you. Serving clients in in Colorado Springs, Pueblo, Denver and the surrounding area.
Colorado Springs bankruptcy – 866-893-2440 or 719-520-0164 – legal consultation
